Obama's adrift on a red-ink sea

One revealing stress test of a political viewpoint is the way it deals with facts that are large, consequential and ideologically inconvenient. For conservatives, the challenge is climate change. A variety of studies, using increasingly refined methodologies, indicate that climate change is happening and that greenhouse emissions play a contributing role. But many on the right aren't comfortable with the policy implications. So some deny the science; more ignore or downplay it.

For liberals, the challenge is deficits and debt. President Obama now argues that we are "more than halfway toward the $4 trillion in deficit reduction that economists and elected officials from both parties say we need to stabilize our debt." Economist Paul Krugman calls the deficit "a problem that is already, to a large degree, solved." At a recent meeting of the House Financial Services Committee, two Democratic members objected to the display of the debt clock -- a running count of the federal debt -- as "a political prop designed to message ideologically." Numbers, it turns out, have an offensive ideological bias.

Downplaying the debt -- arguing that it has stabilized as a percentage of GDP in a 10-year window -- has become an ideological commitment on the left. It is often accompanied by criticism of the "deficit scolds" who attribute moral content to a mathematical dispute.

But the problem with the debt deniers is primarily mathematical. According to the Congressional Budget Office, debt will stabilize -- but at a historically high level and only for about five years. At that point, the upward trajectory will resume, reaching (under optimistic assumptions) 77 percent of GDP by 2023. Under a more realistic budget scenario, the CBO projects the figure will be more like 87 percent -- what the Peterson Foundation calls "debt levels that have been associated with diminished economic growth."

But then the retirement of the baby boom generation, high health costs, the expansion of federal health subsidies and rising interest payments really kick in. Under its more realistic assumptions, the CBO expects public debt to rise to 157 percent of GDP in 2032 and 200 percent in 2037, according to its latest Long Term Budget Outlook. The chart stops in 2043, prompting a note reading: "CBO does not report debt of more than 250 percent of GDP or projections based on debt above that level, such as interest outlays." In other words, their economic model crashes. And the real economy would crash much sooner.

When the debt deniers say that the problem has stabilized, they are really saying: Since the disaster won't fully hit for a decade, let's ignore it now. But even if you embrace the intergenerational negligence of John Maynard Keynes -- "In the long run we are all dead" -- this is a medium-term crisis.

Obama's supporters are quick to counter that the president has a plan to control entitlement spending. But what is the Obama "plan" exactly? He included $400 billion in supposed health care cuts in his 2013 budget -- but they are payment rate cuts for doctors, hospitals and drug companies that have never happened and aren't likely to start. He once talked about increasing the age for Medicare eligibility, but doesn't anymore. He would "consider" a chained consumer price index -- a different inflation measure -- for Social Security. None of this approaches the kind of structural reform needed to avert disaster, and even this much isn't meant to be taken seriously.

Obama has proposed some vague and insufficient ideas on which he places no emphasis and expends no political capital. Particularly since his second inaugural address, he has strongly defended the government in its current configuration while conceding the need for only "modest" reforms that are never urgent. This is not a "plan," it is an inside joke, made with a reassuring wink and nod to the Democratic base. It is the functional equivalent of no plan at all. A tree falling unheard in the forest makes no sound -- particularly when there is no tree to start with.

The irresponsibility of this approach is so astounding that it does raise moral issues. Such complacency during Obama's second term will make gradual adjustments in entitlement programs more difficult. It will put tremendous pressure on nonentitlement federal spending, including programs for the young and poor. It will eventually undermine economic growth and leave the government with less flexibility to deal with future downturns or national emergencies.

Ideologically driven indifference to science or mathematics is common and predictable. But it does not change the level of the oceans -- or of the red-ink sea.

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